Editorial: Michigan had solid year; make 2017 better
Michigan ends 2016 in better shape than when the year began. That steady economic progress, ongoing since the end of the Great Recession, marks an encouraging reversal of fortunes from the state’s Lost Decade, when Michigan failed while the rest of the nation gained.
Gov. Rick Snyder notes Michigan in 2016 was again among the fastest-growing states in terms of income growth and job creation.
In its annual benchmarking survey, Business Leaders for Michigan reports the state is making gains in its goal to become a Top 10 state, as confirmed by a variety of economic measures.
But progress is not coming fast enough to reach that goal anytime soon.
This year, Michigan ranks 31st in employment, up from 48th in 2009, but still in the bottom half of the nation. To move up, the state must lure even more job creating businesses.
Business Leaders took to the Legislature in the lame-duck session a proposal to restart tax breaks and other economic incentives for businesses willing to bring jobs here.
It did not get through the Republican-led Legislature, even though it was supported by Snyder. The business roundtable promises to try again when a new session starts in January, saying the incentives are necessary to compete with Ohio, Indiana and other states that freely use sweeteners to land major employers and projects.
Personal incomes, while coming back, still rank 33rd among all states.
Boosting paychecks depends on bringing more businesses to the state to create a stronger demand for workers.
Efforts to lessen business costs have produced mixed results. Business Leaders reports the state improved or declined in about the same number of the 50 or so indicators used to measure the cost of locating in Michigan. Overall, it remains in the bottom half of states in terms of cost competitiveness.
But the business climate as a whole is better, thanks to lessening of the corporate business tax and a strong showing in innovation. Michigan is 10th in patents, fifth in research produced by its universities and sixth in exports.
Where the state needs the most work, according to Business Leaders, is in developing the skills of its workforce, fixing its dismal infrastructure and education attainment, a category in which Michigan ranks 29th. State schools rank 36th in preparing kids for careers and college.
Michigan won’t push into the top 10 without better performing schools.
Michigan got some good news from the U.S. Census Bureau last week, which reported it posted its fifth straight year of population growth and remains the 10th most populous state.
But its .3 percent increase in residents trails the national average of .7 percent, and almost assures Michigan will lose a congressional seat after the 2020 reapportionment.
Growth and political clout go hand in hand. The fast growing states of the south and southwest are gaining influence while Michigan continues to slide.
What Michigan really needs is a surge. And that requires a big play. Perhaps something along the lines of eliminating the state income tax.
Finding the magic bullet for booming growth should be a priority for the new year.